Monday, July 16, 2012
Sunday, July 15, 2012
Saturday, July 14, 2012
Cities try raising revenue by destroying revenue generating businesses
During the building boom, the Las Vegas Water Authority was bringing in the big bucks with tap fees on new construction. The collected $190 million in 2005 alone. But now, that flood of money has turned in to a tiny trickle with only $3.5 million collected in 2010.
In order to get more revenue in the city coffers, someone came up with the brilliant idea to change the way water bills are calculated. Instead of paying for what you actually use, you are now charged by the size of your meter. With that billing system you could have a small meter and leave your faucet running 24/7 and pay less than a person who has a large meter but hardly uses any water at all. Make sense? Of course not!
This idiotic billing scheme already claimed it's first victim at the end of June 2012 - Larry's Hideaway, a small country bar off the strip.
"The bar has been around for more than 20 years. The bad economy played a role in its closing, but a recent fee by the local water authority, of more than $400 per month, was the straw that broke the camel's back for this bar in the desert oasis." (full story)
In tough economic times, a big hike in utility fees can mean the difference between having a steady base of tax revenue generators or further losses in city income. Considering small businesses employ half of all private sector employees, generated 65% of all new jobs created over the last 17 years, yet spend 36% per employee than large firms trying to comply with federal regulations*, hiking their utility rates is just pouring salt on an open wound.
According to Yelp, Larry's seemed to be a love it or hate it place, garnering some pretty hostile reviews in with the good ones. So the exact role the unexpectedly high water bill played in its closing is not entirely clear. However, small businesses like Larry's are still the economic engine that drives the American economy. If the goal of a government is to generate tax revenue, taking measures to drive revenue generators out of business isn't what I would consider a good plan.
In order to get more revenue in the city coffers, someone came up with the brilliant idea to change the way water bills are calculated. Instead of paying for what you actually use, you are now charged by the size of your meter. With that billing system you could have a small meter and leave your faucet running 24/7 and pay less than a person who has a large meter but hardly uses any water at all. Make sense? Of course not!
This idiotic billing scheme already claimed it's first victim at the end of June 2012 - Larry's Hideaway, a small country bar off the strip.
"The bar has been around for more than 20 years. The bad economy played a role in its closing, but a recent fee by the local water authority, of more than $400 per month, was the straw that broke the camel's back for this bar in the desert oasis." (full story)
In tough economic times, a big hike in utility fees can mean the difference between having a steady base of tax revenue generators or further losses in city income. Considering small businesses employ half of all private sector employees, generated 65% of all new jobs created over the last 17 years, yet spend 36% per employee than large firms trying to comply with federal regulations*, hiking their utility rates is just pouring salt on an open wound.
According to Yelp, Larry's seemed to be a love it or hate it place, garnering some pretty hostile reviews in with the good ones. So the exact role the unexpectedly high water bill played in its closing is not entirely clear. However, small businesses like Larry's are still the economic engine that drives the American economy. If the goal of a government is to generate tax revenue, taking measures to drive revenue generators out of business isn't what I would consider a good plan.
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